Xe or Blackwater, U.S. still paying them

$400 million in contracts despite public breakup

LOCAL CONNECTION

In 2008, Blackwater wanted to open a training facility in Potrero in east San Diego County but withdrew its plans amid opposition from residents. Blackwater has since opened a facility in Otay Mesa near a Southwestern College satellite campus.

WASHINGTON — Despite publicly breaking with an American private security firm in Iraq, the State Department continues to award the company, formerly known as Blackwater, more than $400 million in contracts to fly its diplomats around Iraq, guard them in Afghanistan, and train security forces in North Carolina.

The contracts, one of which runs until 2011, illustrate the extent to which the U.S. government remains reliant on private contractors such as Blackwater, now known as Xe (pronounced zee) Services, to conduct some of its most sensitive operations and protect some of its most vital assets.

Disclosures the CIA had used the company, which most people continue to call Blackwater, to help with a covert program to assassinate leaders of al-Qaeda — new details of which emerged yesterday — have touched off a storm in Washington, with lawmakers demanding to know why this kind of work is being outsourced.

The CIA and the State Department are trying to reduce dependence on outside contractors, but the administration is struggling to deal with an overstretched military and spy service. In the case of the CIA, outsiders help carry out some of its most important jobs, including collecting intelligence in foreign countries, dealing with foreign agents, and taking part in covert programs.

The State Department continues to use Blackwater guards in Afghanistan, despite the company's involvement in civilian shootings in Baghdad in 2007, and despite Secretary of State Hillary Rodham Clinton's pledge to “reduce our dependence on private security contractors.”

The department declined to discuss its ties with Blackwater publicly, but a senior department official said it would be costly for the government to terminate, without cause, the other contracts that are in place. A Xe Services spokesman didn't respond to messages requesting comment.

Following the shootings in Baghdad, which killed 17 Iraqi civilians, the State Department required Blackwater contractors to undergo training in “Afghanistan cultural awareness,” said this official, who spoke on condition of anonymity because he wasn't authorized to speak publicly.

When the department announced it wouldn't renew the company's security contract in Iraq, it cited the refusal of the Iraqi government to issue a license for the company to operate in the country. But Xe has continued to supply aviation services to diplomats in Iraq under a two-year contract worth $217 million. That contract expires Sept. 3, and a spokesman for the State Department, Ian C. Kelly, said the work would be given to another security and logistics company, DynCorp International.

Xe's contract to supply personal security to U.S. diplomats in Afghanistan, which began in 2006 and runs through 2011, is worth $210 million. Xe earns $6 million under a three-year contract to train foreign security guards in anti-terrorism tactics.

In a meeting with department employees in February, Clinton said, “I certainly am of the mind we should, insofar as possible, reduce our dependence.” But she added, “Whether we can go all the way to banning, under current circumstances, seems unlikely.”

The decision to use Blackwater contractors in the assassination program starting in 2004 was born partly out of desperation, said former CIA officials. The spy agency had tried to operate the program in-house and had failed. The agency was reeling from the botched assessments about Iraq's weapons programs, said the officials who spoke on the condition of anonymity, and was desperate for information about al-Qaeda's top leaders.

“You want to have everything when you know nothing,” said one former official familiar with details of the canceled program.

Top CIA officials — including Jose A. Rodriguez Jr., the head of the agency's clandestine service — found outside help.

Rodriguez had close connections to Enrique Prado, a career CIA operations officer who had recently left the agency to become a senior executive at Blackwater. Both Prado and Xe founder and chairman Erik D. Prince signed agreements with the CIA to participate in the program, officials said.

Over time, the officials said, Rodriguez and other senior members of the clandestine service gave up on the Blackwater arrangement to hunt al-Qaeda leaders. By that time, the spy agency was starting to have regular success killing top militants in Pakistan and Afghanistan with Predator drones, and the assassination program had yielded no successes. Robert S. Bennett, an attorney for Rodriguez, declined to comment.